TENET HEALTHCARE CORPORATION (NYSE:THC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
On March23, 2018, Tenet Healthcare Corporation (the “Company”) entered into a support agreement (the “Support Agreement”) with Glenview Capital Management, LLC, Glenview Capital Partners, L.P., Glenview Capital Master Fund, Ltd., Glenview Institutional Partners, L.P., Glenview Offshore Opportunity Master Fund, Ltd. and Glenview Capital Opportunity Fund (collectively, “Glenview”).
to the Support Agreement (i)Glenview agreed to withdraw its notice, dated February2, 2018, to the Company indicating its intention to propose an amendment to the Company’s Amended and Restated Bylaws (as amended, the “Bylaws”) at the 2018 annual meeting of the Company’s shareholders, which the Company plans to hold in early May, and (ii)the Company agreed to amend the Bylaws (as discussed in Item 1.01 below).
The Support Agreement includes, among other provisions, certain standstill and voting commitments by Glenview to the Company, including that Glenview and its affiliates will not beneficially own more than twenty percent (20%) of the Company’s outstanding shares through March23, 2019.
The description of the Support Agreement contained herein is qualified in its entirety by reference to the full text of the Support Agreement, a copy of which is filed as Exhibit 10.1 and is incorporated herein by reference.
Item 1.01. Material Modifications to Rights of Security Holders.
The information set form under Item 1.01 is incorporated herein by reference.
Item 1.01. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements Of Certain Officers.
On March 24, 2018, the Company entered into an employment agreement with Ronald A. Rittenmeyer as the Company’s Executive Chairman and Chief Executive Officer (the “Employment Agreement”). The Employment Agreement provides that Mr. Rittenmeyer will serve as the Company’s Executive Chairman and Chief Executive Officer for the two-year period beginning March 1, 2018 and concluding February 28, 2020 (the “Term”), subject to earlier termination in accordance with the terms of the Employment Agreement.The Employment Agreement provides that Mr. Rittenmeyer will receive an annualized base salary of $1,200,000 for his services as the Executive Chairman and Chief Executive Officer.In addition, Mr. Rittenmeyer will receive an award of restricted stock units with a grant date fair value equal to $7,000,000, which will vest in equal quarterly installments throughout Mr. Rittenmeyer’s continued employment with the Company during the Term. Mr. Rittenmeyer will also receive an award of restricted cash equal to $7,000,000, which will also vest in equal quarterly installments throughout Mr. Rittenmeyer’s continued employment with the Company during the Term.The grant date for these awards will be the last trading day in March, in accordance with the Company’s policy for equity grants awarded outside of the annual grant cycle.Mr. Rittenmeyer will participate in the Company’s Annual Incentive Plan (“AIP”), but will not be covered by its Executive Severance Plan or receive additional grants under its long-term incentive compensation program.
Upon certain terminations of Mr. Rittenmeyer’s employment with the Company, the Employment Agreement provides that Mr. Rittenmeyer will be entitled to receive, subject to his execution of a release of claims in favor of the Company, (1) accrued but unpaid base salary through the date of termination, (2) reimbursement for unreimbursed business expenses incurred through the termination date, (3) payment of any earned but unpaid AIP bonus for the year prior to the year in which the termination of employment occurs, (4) a lump sum payment equal to the amount of base salary that remains payable through the conclusion of the Term, (5) a pro-rata AIP bonus for the year in which the termination of employment occurs, (6) a lump sum payment equal to the AIP bonus Mr. Rittenmeyer would have had the opportunity to earn for the remainder of the Term, with such lump sum based on actual performance for the performance period in which Mr. Rittenmeyer’s employment occurs, and target performance for any remaining performance period thereafter during the Term, (7) accelerated vesting and settlement of all outstanding unvested restricted stock units and restricted cash, and (8) continued coverage under the Company’s health and welfare plans through the end of the Term. to the Employment Agreement, Mr. Rittenmeyer is bound by perpetual confidentiality and nondisparagement covenants.The Employment Agreement also contains noncompetition and nonsolicitation of employees covenants that apply for the duration of Mr. Rittenmeyer’s employment with the Company and for one year thereafter.
This summary is qualified in its entirety by reference to the full text of the Employment Agreement, which is attached hereto as Exhibit 10.2 and incorporated by reference herein in its entirety.
Item 1.01. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On March23, 2018, the Bylaws were amended to include the following revisions:
|•||amended the special meeting bylaw to provide that it can only be amended by the affirmative vote of a majority of stockholders;|
|•||added a requirement that the Company hold an annual meeting of the stockholders no later than thirteen (13)months after the last preceding annual meeting; and|
|•||added a provision governing the adoption and duration of stockholder rights plans.|
The foregoing description of the Bylaws is not complete and is qualified in its entirety by reference to the Bylaws, which are filed as Exhibit 3.1 hereto in marked form showing the amendments described above, and as Exhibit 3.2 hereto in unmarked form, and are incorporated herein by reference.
Item 1.01. Regulation FD Disclosure.
On March26, 2018, the Company issued a press release announcing the entry into the Support Agreement, Glenview’s withdrawal of its proposal and the amendments to the Bylaws. A copy of the press release is furnished herein as Exhibit 99.1 and is incorporated herein by reference.
The information contained herein is being furnished to Item 1.01 of Form 8-K.This information shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 1.01. Financial Statements and Exhibits.
|3.1||Amended and Restated Bylaws of Tenet Healthcare Corporation, effective March23, 2018, marked for amendments|
|3.2||Amended and Restated Bylaws of Tenet Healthcare Corporation, effective March23, 2018|
|10.1||Support Agreement, dated March 23, 2018, between Tenet Healthcare Corporation and Glenview Capital Management, LLC, Glenview Capital Partners, L.P., Glenview Capital Master Fund, Ltd., Glenview Institutional Partners, L.P., Glenview Offshore Opportunity Master Fund, Ltd. and Glenview Capital Opportunity Fund|
|10.2||Employment Agreement, dated March 24, 2018|
|99.1||Press Release issued March26, 2018|
TENET HEALTHCARE CORP ExhibitEX-3.1 2 d556873dex31.htm EX-3.1 EX-3.1 Exhibit 3.1 AMENDED AND RESTATED BYLAWS OF TENET HEALTHCARE CORPORATION a Nevada corporation As Amended and Restated Effective March 5,…To view the full exhibit click
About TENET HEALTHCARE CORPORATION (NYSE:THC)
Tenet Healthcare Corporation (Tenet) is a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets in the United States. The Company operates through three segments: Hospital Operations and other, Ambulatory Care and Conifer. With its networks, including acute care and specialty hospitals, which are engaged in providing outpatient facilities and related businesses, the Company provides a range of healthcare services in the communities it serve. It operates approximately 90 hospitals, 20 short-stay surgical hospitals, 475 outpatient centers, nine facilities in the United Kingdom and six health plans through its subsidiaries, partnerships and joint ventures. In addition, its Conifer Holdings, Inc. (Conifer) subsidiary provide healthcare business process services in the areas of revenue cycle management and technology-enabled performance improvement and health management solutions to health systems.